Federal regulators sanction Rabobank

Federal bank regulators got a strict consent order agreement from Roseville-based Rabobank NA over deficiencies regulators found in the bank's overall programs to find money laundering and suspicious activity.

The consent order was issued Dec. 5, and the Office of the Comptroller of the Currency announced the action Friday in its monthly list of enforcement actions.

The consent order action was listed under the cease-and-desist orders, which are among the strongest actions the regulators take without taking over control.

With its headquarters in Roseville, Rabobank has 119 branches in California and about $14 billion in assets. It is a part of Netherlands global banking giant Rabobank Group.

The federal order did not say how or whether the bank had violated the Bank Secrecy Act or money laundering statutes.

The order demands the bank define and document a policy on the BSA and money laundering law requirements.

“We respect our regulator’s conclusions, and will continue to take measures that further improve various reporting and other internal functions,” said Greg Jones, corporate communications manager with Rabobank in Roseville. “Our levels of capital and liquidity remain strong, and we are committed to serving our customers’ ongoing financial services needs.”

Bank Secrecy Act and money laundering statutes have existed for years to find suspicious flows of cash and also to find money laundering.

Banks are required to report as suspicious activity any cash transaction of more than $10,000 or any movements of cash adding up to $10,000 or more in the period of three months.

To comply with the order, the bank agreed to train employees in “customer identification program” procedures where employees learn the purpose of customer accounts, the anticipated use of the account, the nature of the customer’s business, the customer’s address and the full scale of the customer’s accounts with the bank.

The bank also must have written procedures to comply with monitoring of high-risk or suspicious accounts, and it must have a plan of succession of such monitoring if the designated employee is no longer with the bank.

As part of its agreement, the bank will create “comprehensive policies and procedures for identifying, monitoring, investigating and resolving transactions that pose a greater than normal risk for compliance with the BSA,” according to the consent decree, which was signed by all members of the bank’s board of directors.

The bank also must put into place procedures to address accounts where there is ongoing suspicious activity.

Those accounts will be reviewed by a bank officer annually to see what the purpose of the account is, and if it is consistent with the intent of the customer when the account was opened.